FAIRLAWN, Ohio—Beaver Manufacturing Co. Inc. and Mehler Engineered Products Group enjoyed a long courtship before finally entering into a cooperation agreement that will begin next year.
After 18 months of officials from the two firms getting to know each other and discussing a possible partnership, they have signed an agreement where Mehler will represent Beaver's rubber reinforcement products line in Europe beginning next year.
Mansfield, Ga.-based Beaver makes industrial fiber for the reinforcement of hose and mechanical rubber, particularly in automotive, industrial, and oil and gas applications. It specializes in performance-enhancing treatments for adhesion and improved processing on spiral knitting and braiding equipment. Effective Jan. 1, Mehler in the first phase of the cooperative agreement will take over the sales, service and distribution of Beaver Manufacturing products in Europe.
The partners then plan to extend the cooperation into local, customized development and manufacturing of Beaver's products by Mehler at a later date, but probably sometime in 2018, executives from the two firms said. Mehler, headquartered in Fulda, Germany, has six global facilities: three in Europe, and one each in North America, China and India.
The partnership was announced Oct. 24 by Michael Dubin, Beaver senior vice president and chief operating officer, and Joerg Czempisz, Mehler president and CEO, during the Hose Manufacturers Conference in Fairlawn, Ohio.
"As the demand for our products has increased in the European market, we began to look for the best way to meet our customer needs," Dubin said. "This partnership brings our products one step closer to the end user."
Czempisz said there is very little overlap between Beaver's and Mehler's product line. Beaver is a leading converter of hose yarn reinforcement, while Mehler is a top global converter of textile rubber reinforcement solutions. He said the partnership will expand the firm's portfolio of products it can offer to its European customers.
"This newly formed strategic partnership will position our company in offering RFL-, RF-free and isocyanate-based product solutions to our customers as a one-stop shop," Czempisz said. "Our unique position within the markets we are serving will enable us, as organizations, to get to the next level of customer care by further reducing time-to-market and total cost of ownership."
The two executives said the firms have been involved in discussions for the past 18 months that led up to the partnership announcement.
Czempisz said he was relatively new to the industry when the talks first began. "The people involved need to have a relationship with each other, especially when you are family businesses," he said. "You have to build a strong foundation so you can trust each other. Then you evaluate if there is a good business case to move forward, and that took a while."
He said it was determined that there would be a fit between the two organizations, with very little overlap. Mehler with its sales force based in Germany would be able to help expand Beaver's business in Europe because of the inroads it has with some of the larger customers in Europe.
Part of that includes utilizing Mehler's application and engineering expertise. "We are engineering products together with our customers, and that is something we intend to continue with Beaver," Czempisz said.
Besides getting to know each other, Beaver also had an existing partnership in Europe with Cordus GmbH, part of Cordenka GmbH & Co. Dubin said Cordus had been an excellent partner, and will continue to supply rayon to his firm, as well as Mehler.
But Beaver made the decision that it wanted to take its European business to the next level, as Dubin said his firm currently gains about 80 percent of its revenues from North America and only roughly 5 percent in Europe.
"We made the decision to grow and we felt we needed to find a partner particularly for our European business who could help us with that growth, and that could be a good fit for us potentially globally," Dubin said.
Mehler also wanted to make sure the situation with Cordus was handled properly, as it also does some business with the group, Czempisz said. "We are a conservative German company and (Beaver) is a conservative American company, and it's very important that we are not doing this kind of thing against current partners."
Dubin said the transition plan was put in place that will enable the partnership between Beaver and Mehler to begin Jan. 1.
Leading to manufacturing
As the two firms got to know each other, they also got to the point where they shared each other's capabilities at their respective facilities.
Dubin said what they found was that Beaver and Mehler shared a similar perspective on manufacturing. That helped make Beaver more comfortable about actually having Mehler manufacture its goods.
Czempisz said the firms have a similar view on lean manufacturing and building those processes to help customers. "Basically we are an engineering company with a core aspect in converting as well as in developing together with customers," he said.
Beaver has gone through some general technical testing, and there may be the need for some small modifications, but Dubin said his firm won't have to put its treating units in Mehler's facilities.
"We have the technical capabilities already there; it's basically fine-tuning," Czempisz said.
This was one of key determining factors in convincing Beaver that Mehler would be the correct partner for it to reach its goals in Europe.
"With wanting to grow and the interest in our products—particularly from a technical perspective—increasing in a short period of time, we needed a partner that could take on and support us with those activities," Dubin said.
And in the end, he said Beaver believed it could only grow so much by exporting, adding, "if people are really going to buy into what you're doing, you have to produce there."
From a market perspective, Czempisz said it takes a long time to acquire a new customer, and Mehler will quicken the process immensely for Beaver. "Within our organization we have key account management, which means we have an engineer and a commercial person who are servicing these kinds of customers exclusively," he said.
In addition, as the innovation cycles are getting faster, companies like Mehler need to be "willing to cannibalize their own existing portfolio to continuously grow and continuously be the right parter in speeding up these cycles," according to Czempisz. "Innovation means the time and quality, plus the willingness to take something away by adding something new."
The two executives said the partnership eventually could expand beyond Europe, but it's important to be successful there first.
"We want to get up and running the full scope of the partnership in Europe, and then see what the next steps will be," Dubin said.